The Uber management fiasco took yet another dramatic turn late Friday after former Uber CEO Travis Kalanick appointed two new directors to the board of directors without consulting the existing CEO and other board members.
Kalanick has appointed Ursula Burns, Xerox Corp.’s former CEO, and John Thain, the ex-Merill Lynch chief as the new directors of the most valuable startup.
In the announcement Kalanick made on Friday, quoted by Bloomberg, he said, “I am appointing these seats now in light of a recent board proposal to dramatically restructure the board and significantly alter the company’s voting rights. It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John.”
Uber, on the other hand, stated that this move has come as a complete surprise to them and this is indeed the reason why they are working on putting in place a world-class governance to ensure that they are building a company every employee and shareholder can be proud of.
According to a source close to the matter, this move was made by Travis ahead of the vote scheduled by the board on Tuesday to restructure the company’s corporate governance.
The former CEO considers the appointments will improve the board of directors ahead of the upcoming vote on Tuesday.
Kalanick resigned as CEO on June 20 following the pressure from Benchmark and other early investors although he’s still a member of the board of directors and owns a large stake of the company and according to the existing rules has the right to appoint three directors to the board.
But this rule is under arbitration after Benchmark filed a complaint against Kalanick in August stating that he concealed relevant information about the scandals and internal problems before they granted him the authority to appoint three seats in the 11-seat board of directors. Benchmark wants Kalanick to give up the seats.
As per the provisions drafted by Uber and Goldman Sachs Group, according to a source close to the matter, following changes would be made:
— Alter the existing rules so as to revoke special voting powers previously granted to Uber’s early investors. This would mean taking away a huge deal of power from Kalanick even though he owns a large stake in the company.
— Set a deadline for Uber to public.
— Give more control to Dara Khosrowshahi over the three seats currently controlled by Kalanick.
It would now be interesting to see what steps are undertaken on Tuesday.